1. Democracy and Policy Responses to the 2007-08 Food Price Crisis Cullen Hendrix College of William & Mary chendrix@wm.edu

2. Is democracy good for the poor? Of course! – McGuire 2010; Acemoglu and Robinson 2005; Baum and Lake 2003, Boix 2003; Bueno de Mesquita et al. 2003; Ghorbarah, Huth, and Russett 2004; Lake and Baum 2001; McGuire and Olson 1996 Not so much… – Keefer and Khemani 2005, Ross 2006, Nelson 2007 Focus on outcome indicators, rather than government actions Focus on addressing endogenous “problems” Alternate approach: common shock, variable responses

3. The 2007-08 crisis

4. Policy responses and food security The Good – Food-for-work, school feeding, cash transfers – Targeted at most insecure households The Bad – Food rationing/stamps, releasing food stocks – Higher technical requirements, producer disincentives The Ugly – Price controls/consumer subsidies, export restrictions – Large market distortions at home/abroad, large subsidy to middle- and upper class households

5. Argument: democracy and pro-poor policy Distributive effects of democracy – Urban and middle/upper-class bias (Bates, Stasavage) – Democracy should mitigate both Median voter logic in poorer, more rural societies Incentives to target benefits – Incentives to minimize externalities Focus on three levers – Food-for-work programs – Consumer subsidies/price controls – Export restrictions

6. Policy levers InterventionHelpsHurts Market Distortions/Spill overs Food-for-work Poor Unemployed Self-selection into program Increasing infrastructure Consumer subsidies/price controls Consumers w/market access Urban poor Rural producers Hoarding Black markets Large fiscal impacts Export bans Consumers w/market access Rural producers Inaccurate demand signals Beggar-thy- neighbor effects

7. Hypotheses H1: Political democracy will be positively associated with use of food-for-work programs. H2: Political democracy will be negatively associated with use of general consumer subsidies/price controls. H3: Political democracy will be negatively associated with export restrictions.

8. Methods DVIndicators for policy levers » Reduced Taxes on Foodgrains » Release of Food Stocks » Export Restrictions » Price Controls/Consumer Subsidies » Cash Transfer » Food-for-Work Programs » Food Stamps/Rations » School Feeding IVDemocracy » Polity2 » Democracy dummy (Polity2 ≥ 6) » WBGI Voice & Accountability Controls GDP per capita, population, high vulnerability to food & fuel prices, government consumption % of GDP, total food exports EstimationLogistic regression with robust SEs

9. Food-for-work programs Syria Jamaica Sri Lanka

10. Consumer subsidies/price controls Syria Jamaica Sri Lanka

11. Export restrictions

12. Conclusions Is democracy good for the poor? – Appears to be better, at least in terms of policy instruments Clear pro-poor advantage in domestic adjustment – Less likely to use consumer subsidies/price controls – More likely to use targeted interventions Less-clear pro-poor advantage in external adjustment – Somewhat less likely to pursue export bans – No difference regarding taxes on food imports Caveat: emphasis is on policy choices, not outcomes – Future research on poverty effects, subsequent electoral fortunes